In considering the question of surrender values and paid-up policy values, it must be borne in mind that the conditions affecting different offices vary to a great extent and that, consequently, no hard and fast bases can be given.

(i) The surrender values and paid-up policy values must be reasonable from a competitive point of view.

(ii) The values of one class of policy must be comparable with those of other classes.

(iii) The surrender values and paid-up policy values must be interdependent inasmuch as at the limiting age of the table they are equal.

(iv) Simple calculations only must be involved, the results being obtained as far as possible by the inspection of prepared tables.

(v) A reasonable profit must be reserved for the office.

(vi) The heavy expenses incidental to the issue of a policy must be met, and hence no surrender value should be allowed in ordinary cases until, say, two full years' premiums have been paid.

A reversion, in its simplest form, is merely the right of one person to receive a sum of money, or its equivalent in securities, on the death of another person now living. In practice this right is often contingent upon the happening of some other event, such as the reversioner surviving the life tenant, and as the existence of such a contingency means that a purchaser might suffer entire loss of capital, it is usual to eliminate it by effecting an appropriate policy of assurance. When this is done the contingent reversion becomes an absolute one, subject to the payment of the appropriate premium.

The present system of decennial censuses has been the method employed ever since the first census was taken in 1801, but there is general agreement amongst those interested in population statistics that ten years is much too long an interval between successive enumerations. A series of censuses at quinquennial intervals would, without doubt, afford a more reliable basis for the solution of many problems in demography. Further, if a permanent census office were set up all the information as regards movements of the population in and out of the country, and to and from various districts in the country, at present supplied to various Government departments, should be given to that office. A closer link between successive censuses would thus be forged, and intercensal populations more readily obtained with much greater accuracy than at present.

The principle underlying all Discounted Bonus Schemes is that the ordinary full profit premium is reduced by anticipating future bonuses. These reduced premium policies are then usually allowed to participate in future bonuses but only in so far as the bonus declared exceeds that anticipated.

This class of business was first introduced in 1854, and eventually became popular with a section of the assuring public to whom the benefit of a with-profit policy at a minimum cost made a strong appeal. In the first instance the Discounted Bonus policy made its appearance in connection with a compound reversionary bonus system, but as it grew in popularity it was adopted by other offices and combined with the various methods of bonus distribution.

Exchange is, in effect, a system of perfected barter, not of goods but of their equivalent in currency, payments in one place being exchanged for payments in another. Since, however, in actual practice the total payments in the two places do not exactly balance, there arises the complication of exchange, which has been described as the price of monetary claims on distant creditors. The balance of indebtedness is either retained, at interest, to meet future liabilities, or remitted in coin, the choice of alternatives being determined by the rate of interest ruling, and the cost of remitting coin. Other things being equal, credits will be retained where the rate of interest is highest, but, where one or other of the currencies is in an unsatisfactory condition, a considerable element of speculation is introduced, while, in ordinary circumstances, exchange will only fluctuate between fixed limits, viz., those at which it becomes profitable to transmit coin, or bullion, in either direction. Apart from the differences between the respective currencies involved, these limits vary according to the distance between the respective countries, the cost of freight, commission, packing, and insurance against the risks incurred in the transmission, and the local rates of interest.

The intention of these remarks was to deal with the financial and actuarial basis of the 1918 Act with particular reference to the various funds set up under that Act.

The 1918 Act, however, did not create an entirely new financial basis to replace that of the original (1911) Act, but rather introduced important modifications in the financial structure of that Act, chiefly by the setting up of protective funds. In order, therefore, fully to understand the present position it was considered desirable to give a short sketch of the position under the 1911 Act and the circumstances which led to the passing of the 1918 Act and the creation of these protective funds.